Rent control:
A)increases social welfare.
B)affects the demand for rental housing.
C)creates a dead weight loss.
D)represents a price ceiling on rental prices.

Question

Quizplus · Accepted Answer

Rent control represents a price ceiling on rental prices, limiting how much landlords can charge for their properties. This can lead to a reduction in the quantity and quality of rental housing available, as landlords may not have enough incentive to invest in maintaining or improving their properties. Additionally, rent control can create a dead weight loss, as there may be inefficient allocation of resources and reduced overall economic activity. While rent control may provide short-term benefits to renters in the form of lower prices, it can ultimately have negative impacts on both renters and the broader economy.

Rent Control